Cisco Systems Inc. is currently on the rise as its fiscal fourth-quarter revenues topped the estimated mark of several analysts. The American multinational technology company attributed its growth on strong sales. In a statement released by the company on Wednesday, its sales rose 3.9 percent to $12.8 billion in the quarter that ended on Jul. 25, with profit before certain costs of $0.59 a share.
The latest increase in Cisco's revenues is considered as the biggest since Feb. 12. According to Bloomberg, the results were in line with the company's forecast for the quarter. Robert W. Baird & Co. analyst Jayson Noland said the San Jose, California-based network-equipment manufacturer set feasible targets to make a smooth transition from longtime Chief Executive Officer John Chambers to Chuck Robbins, who took over Jul. 26.
"I'm stepping into the CEO role at an incredibly exciting time for Cisco," Robbins said in a statement, as per Business Insider. "We closed out our fiscal year with record revenues and record non-GAAP EPS, for both Q4 and FY15. I'm particularly pleased with the strong growth of deferred revenue which shows we are very effectively driving our business to a more predictable software-based business model, at the same time as growing revenues and earnings."
Robbins' appointment, however, brought major changes in Cisco. Two of its top bosses, COO Gary Moore and President Rob Lloyd, resigned. CTO Padmasree Warrior, on the other hand, was recently replaced by Zorawar Biri Singh.
Meanwhile, Cisco Systems Inc. also took advantage of the continued sales strength in the States, where revenue rose 7 percent compared to the previous year. Moreover, the collaboration business, which includes the Webex conferencing service and videoconferencing equipment, also grew 14 percent. It matched the 14 percent sales increase in Cisco's data-center server unit, which has been its fastest growing product category.
Additionally, Cisco's shares are up over 100 basis points in the wake of its financial report, Tech Crunch noted. In regular trading, Cisco was roughly flat in a broadly down market. But despite not being a media darling, Cisco remains to be an exceptionally profitable corporate vehicle.
Cisco Systems Inc., however, still faces a series of long-term threats. Many phone companies and large corporations are interested in using networks that are more software-driven, instead of relying on expensive, proprietary hardware like the ones made by Cisco. Businesses also are outsourcing their networking needs to cloud-computing companies including Amazon.com Inc. and Google Inc.
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